Monster that won ' t die: the state budget crisis

From "Terminator" to the remake of "Cape Fear," movies are jammed with monsters and bad guys who, not having been entirely killed, emerge from the water or climb over a railing and we're all on the run again. So it is with the state budget crisis. On Friday morning HGEA revealed that Governor Lingle has sent over a new proposal that contained a little give on furloughs and layoffs, so the union decided to send back a counteroffer that also contained a little give. Both sides had been toning down their rhetoric of late and it is a fact that the new proposals narrowed the gap between their various stands on employees sharing the pain of lower tax revenues. By Friday afternoon the specter of confrontation and crisis was back, with the governor saying her hopes of conciliation were dashed after she read the counteroffer. Lingle called her cabinet into emergency session over the weekend to do another round of spending cuts, possibly including another round of outright layoffs. It's a horror movie in which the monster keeps coming back as screaming taxpayers run away from the swamp. A union counteroffer that falls short of closing the budget gap is not, in and of itself, sufficient reason to gnash the gubernatorial teeth. It is the essence of bargaining that no offer is practical until the last one, the one that is accepted by both sides. To evaluate offers at this point in the process, when each side is presumably asking for more than it expects to get in the end, each side must consider the trickier and more subjective criterion of whether the other side's latest proposal is close enough to a settlement that you can see it from here. If the governor's people know what they're doing and don't have unreasonable expectations, their dismay at the new union counteroffer suggests that they think HGEA is still angling for binding arbitration in the hope of getting a better deal from the arbitrator. What we know for certain is that the governor has responded to HGEA's newest proposal, and to the still-lower revenue estimate from the Council on Revenues, by calling her lieutenants into a weekend meeting to figure out where they're going to cut next. I often call out people who I think are holding their breath until the rest of us turn blue, that is, artificially amplifying a crisis to show everyone it was a bad idea not to treat them better. But in this case, it is hard to see how any governor of any political stripe could do anything different from what Linda Lingle is doing. Tax revenues are still way below pre-recession rates and the state government is overspending its revenues even after several different kinds of spending cuts. You should know that I have heard whispers from the union side that suggest the state government negotiators have been high-handed with them and sometimes didn't seem all that interested in real bargaining. Maybe a different approach in June could have led to a holding hands approach to furloughs that would have prevented all the legal wrangling. But even if that's the case, the situation both sides face now is a still-deepening state budget deficit that is likely to force more layoffs than if all of this had been resolved early in the summer. Maybe it just wasn't possible, but it's too bad.